Johnson County holds public hearing on proposed water and sewer development fees; farmer urges ag exemption for tap upsizes

Johnson County’s Board of Commissioners held a public hearing July 21 on a revised water and sewer system development fee study and separate bulk-capacity fees, receiving technical presentation from Utilities Director Chandra Farmer and a public appeal from a local hog farmer seeking relief from the SDF for upsizing a water tap.

Farmer told the board the county hired Willdan Financial Services and used the combined-cost method under session law 2017-138 and the relevant statute to calculate recoverable capital costs and a debt-service credit. Using a 20‑year capital improvements plan, the county’s analysis produced a water cost-per-gallon figure that implies a statutory maximum residential SDF of $8,980 per equivalent residential unit (ERU) for a standard 3/4‑inch service. Farmer recommended an interim increase to $6,000 in fiscal 2025–26 and an update to the analysis before fiscal 2026–27; she said the SDF is the maximum the statute allows and that the county may charge less than that figure.

On sewer, Farmer said a statutory change required use of 75 gallons per bedroom per day (down from 80), producing a proposed sewer ERU fee of $3,890 (down slightly from the current $4,020) and a per‑gallon sewer charge of $14.84. Farmer said the SDF calculations exclude grant‑funded projects, developer‑constructed facilities and replacement/rehab projects, and include only capacity‑building projects. She also described a required debt‑service credit and explained that bulk water and sewer customers (towns and private utilities with interlocal agreements and master meters) are calculated differently; she proposed assessing bulk water capacity fees by hydraulic zone (zones 323, 385 and 492) with proposed interim rates of about $19.24–$21.72 per gallon for fiscal 2025–26 depending on zone, and a proposed bulk sewer fee of roughly $11.01 per gallon per day for core bulk customers.

During public comment, Eddie Rowe of Princeton said five of his wells had recently run dry during high heat and asked the county to waive or adjust a $38,000 SDF charge to upsize his service from a 1‑inch tap to a 2‑inch tap so he can meet summer drinking-water needs for his hog farm. Rowe said he has invested in on‑site piping and had been tankering water; commissioners and staff discussed whether upsize of an existing tap constitutes a “new service” under current policy and whether the county has discretion to credit the abandoned smaller tap against the fee for a larger tap. Utilities staff confirmed each new tap is treated as a new service in their policy but said a credit for an abandoned tap could be analyzed and potentially applied. County Attorney Jennifer Slusser advised against ad hoc waivers of written policy without a legal review and recommended staff study options, including looking at other counties’ agricultural rates or exemptions.

No final votes were taken on the SDF or bulk rates at the July 21 hearing. Farmer said she will send detailed information to bulk customers, will accept feedback, and intends to return in August with final recommendations; the board scheduled continued consideration on the Aug. 4 agenda. Commissioner questions included requests for projected revenue at the proposed interim and maximum rates and clarification that the SDF is the statutory maximum produced by the methodology rather than an arbitrary cap.

The board and staff also discussed implementation details: residential SDFs are typically paid before a building permit is issued (often by developers or builders), nonresidential charges are usually tied to meter size with discretion to charge cost‑per‑gallon for atypical users, and bulk customers register purchases under existing interlocal agreements. Farmer said system updates and capital‑project cost changes would be reflected in future analyses as required by law (statute requires an update at least every five years). Commissioners asked staff to research agricultural rate practices in neighboring counties and for legal review of any policy changes affecting credits or exemptions.

The hearing included technical discussion about supply contracts (the county’s short‑term purchase from the City of Raleigh that would expire during the 20‑year planning window), nonrevenue water adjustments and inflow/infiltration factors for sewer, and the county’s planned Lower Noose water treatment facility (planned online in 2033 in the CIP). Farmer said the county posts its analysis for at least 45 days and may amend it before adoption.

The board will not act on rates at this meeting; staff will bring a final recommendation in August that could set an effective date for SDFs of Oct. 1 and for bulk capacity fees of Nov. 1 if the board approves them.

(Reporting note: all direct quotes and technical numbers in this article are drawn from the July 21 presentation and public comment. Where the transcript used variant spellings of staff names, the article uses the spelling given at the start of the presentation.)